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R&C Characteristics and Implications

Is the R/C
difficult or Is the R/C
Is the R/C Is the costly to nonsub- Competitive Performance
valuable? R/C rare? imitate? stitutable? Consequences Implications
Competitive
No No No No Disadvantage
Below AIR

Competitive
Yes No No Yes/No Parity
AIR

Temporary AIR to Above


Yes Yes No Yes/No Advantage AIR
Sustainable
Yes Yes Yes Yes Competitive Above AIR
Advantage

Resource = R Capability = C AIR = Average Industry Returns


Assumption: Rents are appropriated by the firm.

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